What does it mean to "gray shirt" in college sports?

A gray shirt is a type of accounting trick teams use to get around the annual scholarship limits. For example, football teams can grant 25 scholarships each year. But they can grant more than that by enrolling the extra players in January and counting them against the next year's class.

A "Gray Shirt" is a recruit that signs a letter of intent, but doesn't start taking classes until the spring semester of college, basically giving the player another year to develop before his eligibility to play is used.